How women can build a nest egg

Mary Hunt was writing “The Smart Woman's Guide to Planning for Retirement” when she realized she wasn't walking the walk.

As she was crafting the book's strategies, which included owning your home outright, Hunt and her husband happened to be refinancing their Garden Grove home of 27 years. “We didn't take a lot of cash out, but we certainly had a mortgage that we could've never paid off,” Hunt, 65, admits. “So while writing this book, we put our house up for sale.”

Only 8 percent of women of all ages feel sufficiently educated about preparing for their retirement, according to a 2011 survey by Transamerica. Women also face greater obstacles than men in attaining retirement security. They live longer, earn less, spend more time out of the workforce and reap lower Social Security benefits, according to an AARP report.

Hunt sat down with the Register to discuss her recently published book and her advice for women to improve their financial health and prepare for their retirement.

Q. Is your book more for single or married women?

A. I address it to women of all ages and all situations because I think there are fundamental things every woman needs to achieve. For instance, know how to manage money. There are a lot of women who don't have a clue because their husband has done it. You can't believe how many women wake up a widow suddenly and don't know how to write a check or where the money is.

A money management system includes a budget. And if your expenses and income are so far apart, you have to know where you can cut back. I also think everyone needs an online savings account that's tethered to her checking account because it's so important to automate your finances as much as possible, like 10 percent out of every one of my paychecks is going to go straight into savings.

Q. What's one of the most important steps a woman should take when planning her retirement?

A. Every woman needs to know how to build and maintain an emergency fund for the unexpected – the refrigerator goes out, a child goes to the emergency room. The reason is so that you can start funding your own emergencies, rather than using credit cards. And when you fund something out of there, you've got to pay it back. It needs to be enough savings that you and your family could pay all of your bills for six months without any income. It trumps everything, including getting out of debt.

Q. Can you explain your method for getting out of debt?

A. Anybody can pay back their debt using their minimum required payments as the foundation. Whatever is the total of your minimum payments right now – say it's $298 – you make a commitment that, until I'm out of debt, I will pay $298 every month (even as you pay off, say, individual credit cards). Also, your minimum payment goes down as your balance goes down, but you don't lower the payment you're making. You keep it fixed. As the first one pays off, you take its payment and add it to the next.

Q. How did you come up with all these steps?

A. I've written about these things all along, but never in the context of specifically for women in retirement. I looked at my own self. And what I want people to know is, you may have to do some drastic things, you may have to sell the house, you may have to move to a lower cost-of-living area, to another state. But you have to plan.